America's student debt nightmare actually started in the 1980s

St. Elmo's Fire, screenshot We know that Americans have accumulated an astounding $1.2 trillion in student debt, and we know that $85 billion of that debt is past due.

We know that the average head of household under 40 spends more a month on student loan payments (around $404) than the average college-educated family spends on groceries every month.

The question is how this situation got so bad, and why the debt keeps piling up higher and higher.

The answer is pretty simple: While the cost of college education has skyrocketed, state governments are doing dramatically less to help residents foot the bill — and that goes back way before the topic garnered a bunch of attention during the Great Recession. It goes back to the 1980s.

A mismatch has emerged

"[Students are] put in a position where its an investment you have to make," said Reid Setzer, a policy analyst at D.C. based group, Young Invincibles (YI). "But that hasn't been matched by public support."

On the cost side, tuition at private colleges surged an average of 44% from 1993 to 2013. At public institutions it jumped 79% during the same period.

You'll note that part of that period includes the Great Recession — a time when states slashed budgets to make up for collapsing tax revenue. Like everything else, higher education was hit hard by these cuts.

From 2000 to 2010, public higher education funding (that's on the state and local level) fell 21% per student, according to the New York Federal Reserve. At the same time, costs rose an average of 33.1% at public institutions.

Meanwhile, federal aid programs like the Pell Grant Program have not kept their awards up with inflation. An award that once covered 75% of in-state tuition now covers less than 30%.

In short: "People don't want to raise taxes to fund education," said Setzer.

Over the last few years, states have seen their coffers fill up again as the US economy has recovered. But state funding for education has not kept pace with that at all. In fact, state funding for higher-ed remains an average of 23% lower than it was before the recession, state by state.

NY Fed

It is clear we still have a huge problem here, recession or not.

See, the recession was just a catalyst — it was the event that created a storm of millions of unemployed who were suddenly unable to pay their loans, and millions of students who had indebted themselves to go to college and then graduated into an employment wasteland.

But this whole mess is bigger than that.

What we're witnessing, according to some in the world of high-education, is an ideological shift — one that is putting our entire educational system at risk.

In June, F. King Alexander, the President of the Louisiana State University testified before the US Senate about what he said was the "greatest challenge facing public higher education today...the continual decline of state appropriations."

It wasn't always this way

See this under-funding didn't start in 2000, or even in the 1990s.

"....state reductions experienced in the early 1980s were just the beginning of a three-and-a-half decade decline in state support for public higher education," King told the Senators.

"The result has been that state funding for higher education sits currently around 48% to 50% below where it was in 1981 in state tax effort, which measures state spending as a percentage of higher education support by state per capita income."

Basically, consciously or unconsciously, the states decided that it was up to the federal government to fund higher-education. They abdicated their responsibility. The recession just meant they could cut more all at once than they had in the past.

"If we don't look to new federal policies to address this ongoing state funding dilemma, we will continue to witness an international (OECD) decline in the percentage of our 25-34 year old population with college degrees, which has fallen to a ranking of 12th," said King.

"This declining international ranking is even more problematic when you consider that our 55-64 year old population ranks in first in the same OECD category."